The morning news. [volume] (Savannah, Ga.) 1887-1900, 1887-09-23
Money and Prices.


Editor Morning Ne,Ds: The commercial
part of the country has for some time been
more or less disturbed by the growing
scarcity of money In financial circles.
Various causes have been alleged for the
stringency; the newspapers insist that the
enormous surplus lying idle in the Treasury
vaults is the principal factor. 1t has some
influence, no doubt, and probably a good
deal; but we must remember that these
arguments are mostly for political effect.
Too much railroad building is also urged,
and likewise no doubt with some justice, as
an assisting cause. Another explana-
ton, and one that is entitled to
great weight, is the immense amount of
money now out in the country, South and
West, employed in harvesting and market
ing the cotton, corn, wheat and other crops.
And yet it seems to me that all these causes
combined, while they would reasonably
cause activity and full rates in the money
market, ought not of themselves to bring
about state of affairs such as now seems
to exist. / believe the chief influence
comes from another source, and one from
which few people would be apt to expect
such an influence to come
1t is notorious that speculation in this
county has been dormant for months. Now
1t Is universally known that financial panics
often arise from vast amounts of money
being locked up in speculative ventures in
stocks or produce in times of unusual activi-
ty. Is it not reasonable to conclude that a
very similar effect may be produced by the
other extreme, namely, the locking up of
vast sums of money out of speculative ven
lures?
Speculation, whatever be its other effects,
is the fy-wheel of the commercial engine
regulates 1t and keeps it going. The truth
is, the money il boarded up, that portion of
it which usually goes TO maintain normal
state of speculative activity.
The evil effect of this is two-fold; the pro
duce and securities being deprived of this
usual and necessary support become more
and more depressed, and are forced to
abnormally low levels of price; and next,
the money centres do not receive the flow of
money, also usual, aud which would have
signal effect in keeping the wheels of bust
ness in motion. These influences, moreover,
react upon themselves: the producer gets
less for what he produtc s, there is less
money value, and consequently less money
in the country. The holder of 800 shares of
stock, worth ordinarily so, 900, finds him
self worth only $4,000 and naturally feels
impoverished accordingly. There are
good many people who think. or pretend to
think, that these are evils of speculation.
They are wrong; the contrary is the case.
They are evils due to absence of specula-
ton.
This being the case, l can see no grounds
for serious alarm; the troubles will rectify
themselves in due course of time. Our cot
ton crop of say 6,750,00 bales, is being
marketed unusually early at price low,
| ii is true, but still better than many feared
would prevail This will release many mil
lions which car then be diverted to other
channels, and the same holds good to a GER
| tain extent with regard to the great crops
of the West.
Then before long the country will wake
up and see that prices are too low: that
wheat at roc, corn at 40c. and cotton at &C.,
without excessive production of any, are
not bringing as much as the articles are
worth. There is plenty of money some
where in the country, and when once
breeze of normal speculative activity fills
the sails of commerce, the ship will move
on, whether the United States Treasury
vaults contain fifty or one hundred and
fifty millions. DEMoCRITUs.